Orrick State Attorneys General Newsletter – August 2021

August.05.2021

  1. State Attorneys General File Fourth Lawsuit Against Google
  2. State Attorneys General Reach Settlement with Distributors in Opioids Lawsuit
  3. State AGs Write Congress Supporting Federal Legislation That Would Provide Federal Trade Commission with Authority to Obtain Equitable Monetary Relief
  4. California Attorney General Bonta and U.S. DOJ Reach $37.5 Million False Claims Act Settlement with Medical Providers
  5. New Attorneys General Appointed in Oklahoma and New Jersey
  6. State Attorney General Spotlight: Colorado Attorney General Phil Weiser

1. State Attorneys General File Fourth Lawsuit Against Google 

Utah Attorney General Sean Reyes, joined by 35 states and the District of Columbia, filed the fourth antitrust lawsuit against Google since October 2020, claiming that Google’s Play Store unlawfully quashes competition in the market for Android app distribution and in-app payment processing. The suit, filed in the Northern District of California on July 7, 2021, alleges Google violated federal and state antitrust and consumer protection statutes, including Sections 1 and 2 of the Sherman Act. The suit seeks both monetary and injunctive relief.

Unlike previous suits that addressed Google’s anticompetitive conduct in search and advertising, this suit focuses on alleged monopolistic behavior in its Play Store. Specifically, the complaint scrutinizes the way Google’s agreements with device manufacturers like Samsung and mobile service providers like Verizon restrict Android app developers’ ability to distribute on platforms other than Play Store. The complaint asserts Google has taken several steps to unlawfully maintain a monopoly, including preinstalling the Play Store on all Android smartphones, refusing to advertise other app stores on its search engine and YouTube, and showing users false and misleading malware warning prompts when they attempt to download apps outside the Play Store. Additionally, the attorneys general assert Google unlawfully ties in-app billing to the Google Play Store, which subjects developers to rules and fees, such as a 30 percent commission on transactions set to go into effect in September 2021.

2. State Attorneys General Reach Settlement with Distributors in Opioids Lawsuit; Other State AGs Oppose 

On July 21, attorneys general from more than a dozen states announced a settlement with pharmaceutical distributors and an opioid manufacturer totaling $26 billion. Under the settlement, the distributors will pay $21 billion over 18 years, while the manufacturer will pay $5 billion over nine years. The agreement requires that most of the money be spent on opioid treatment and prevention. Each state’s share of the funding is determined by using a formula that takes into account the impact of the opioid crisis on the state, such as the number of deaths, the number of residents with substance use disorder, and the number of opioids prescribed, plus the population of the state.

In addition to monetary relief, the settlement includes the following injunctive remedies:

  • Establish a centralized clearinghouse to provide distributors and states with aggregated data and analytics about where opioids are going and how often.
  • Use data-driven systems to detect suspicious opioid orders from customer pharmacies.
  • Prohibit shipping of and require reporting of suspicious opioid orders.
  • Require senior corporate officials to engage in regular oversight of anti-diversion efforts.

The negotiations were led by the state attorneys general from North Carolina, Tennessee, California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, New York, Ohio, Pennsylvania, and Texas. Although many attorneys general have signed on to the settlement, Washington Attorney General Bob Ferguson and West Virginia Attorney General Patrick Morrisey issued statements opposing the settlement.

3. State AGs Write Congress Supporting Federal Legislation That Would Provide Federal Trade Commission with Authority to Obtain Equitable Monetary Relief 

On January 13, 2021, the Supreme Court of the United States held in AMG Capital Management, LLC v. Federal Trade Commission that Section 13(b) of the Federal Trade Commission Act does not authorize the FTC to seek, or a court to award, equitable monetary relief such as restitution or disgorgement. This decision considerably weakens the FTC’s ability to obtain monetary relief in cases it brings under the FTC Act. In response to the court decision, legislation has been introduced in Congress known as the Consumer Protection and Recovery Act that would explicitly provide the FTC the authority to obtain equitable monetary relief.   

Earlier this summer, New York Attorney General Letitia James and Colorado Attorney General Phil Weiser, along with attorneys general from 26 other states and the District of Columbia, submitted a letter urging Congress to enact the legislation. According to the AGs, “the AMG decision upends four decades of FTC practice and seriously undermines the FTC’s efforts to combat fraud and other anticompetitive or unfair trade practices.”

4. California Attorney General Bonta and U.S. DOJ Reach $37.5 Million False Claims Act Settlement with Medical Providers 

California Attorney General Rob Bonta and the U.S. Department of Justice announced a settlement agreement with Prime Healthcare Services System and two physicians. The settlement alleges that Prime paid kickbacks when it intentionally overpaid to purchase a physician’s practice and surgery center because Prime wanted the physician to refer patients to one of its medical facilities. The settlement also alleges that Prime hospitals billed Medi-Cal, the Federal Employees Health Benefits Program, and the U.S. Department of Labor’s worker compensation programs for false claims based on inflated invoices for implantable medical hardware.

5. New Attorneys General Appointed in Oklahoma and New Jersey 

Oklahoma Governor Kevin Stitt appointed John O’Connor to serve as the state’s attorney general, filling the vacancy created when Attorney General Mike Hunter resigned earlier this summer. Prior to his appointment as Attorney General, O’Connor practiced law for a Tulsa-based law firm, focusing on commercial and general civil litigation. General O’Connor received his degree in political science from Oklahoma State University and his law degree from the University of Tulsa College of Law. Under the Oklahoma Constitution and state statute, the governor has the authority to appoint an attorney general to fill a vacancy. General O’Connnor will serve out former AG Hunter’s term, which expires January 9, 2023, and has the option of seeking election to the office in his own right, in Oklahoma’s 2022 elections.

New Jersey Attorney General Gurbir Grewal will soon be vacating his position as New Jersey Attorney General to lead the enforcement division of the Securities and Exchange Commission. General Grewal was appointed to the position by SEC Chairman Gary Gensler. Attorneys general in New Jersey are appointed by the governor, not elected. Governor Phil Murphy has appointed Andrew Bruck to become the acting attorney general. Bruck is a former Assistant U.S. Attorney for the District of New Jersey and served as Senior Counsel, Deputy Chief of Staff, and Acting Chief of Staff for then-Deputy Attorney General Sally Yates at the U.S. Department of Justice. Bruck graduated from Princeton University and Stanford Law School.  

6. State Attorney General Spotlight: Colorado Attorney General Phil Weiser 

Attorney General Phil Weiser was elected in 2018 and sworn in as Colorado’s 39th attorney general. Prior to his election, Weiser served as the Hatfield Professor of Law and Dean of the University of Colorado Law School. Prior to that, Attorney General Weiser served as a Deputy Assistant Attorney General in the U.S. Department of Justice and as Senior Advisor for Technology and Innovation in the Obama Administration’s National Economic Council. In addition, General Weiser served in President Clinton’s Department of Justice as Senior Counsel to the Assistant AG in charge of the Antitrust Division.

General Weiser also served as law clerk to U.S. Supreme Court Justices Byron R. White and Ruth Bader Ginsburg, and to Judge David Ebel at the Tenth Circuit Court of Appeals.